America Saves, America Shames

We’ve just concluded the ninth annual “America Saves Week,” such a wholesome-sounding event that it seems almost churlish to complain about it. As my pal Chuck Jaffe put it at Marketwatch, if the event’s name were accurate, it would be called “America Doesn’t Save Enough Week.”

The United States’ savings rate (the amount of our disposable income we save) is currently 5 percent—a dismal number that is, regardless, rather high by the standards of the past two decades. So why quibble with more than 1,700 business and non-profits running the gamut from banks to consumer advocacy organizations asking notoriously savings-averse Americans to put aside a few more pennies? There is, as they say on children’s report cards, room for improvement.

But where do we expect that improvement to come from? That’s the rub.

According to the America Saves website, the week “is an annual opportunity for organizations to promote good savings behavior and a chance for individuals to assess their own savings status.” Banks offer webinars like U. S. Community Credit Union’s “5 Steps to Financial Fitness” and “12 Money Mistakes You Cannot Afford to Make” for the occasion. Prudential Financial put out a press release designed to “help Americans recognize the five common human behaviors that can deter them from saving for retirement,” which include “I want it now.”

America Saves promoted the principle of deferred gratification via the hashtag #Imsavingfor. Twitter users who shared their “Imsavingfor” goals were entered in a contest to win $500. “I am saving to visit my brother that’s stationed in Hawaii,” wrote one woman.

So plan, people, plan! As John Buhrmaster, the chair of the Independent Community Bankers of America, put it, “it’s never too late to develop good savings habits to achieve financial stability.” And what might those good habits be? Well, Fidelity Investments suggests building up your deferred-gratification muscles by giving up one night at the movies a month so you can pay your cable bill in retirement.

Skipping a monthly movie to live better in retirement is ridiculous advice, and not just because the Motion Picture Association of America reports that the average American only sees a movie in the theaters once every two months. It’s ridiculous advice because overspending is not the sole cause of our savings woes, and we know it. It was a decade ago, after all, that Elizabeth Warren first revealed in The Two Income Trap that housing, healthcare and education cost the average family 50 percent of their discretionary income in the 1970s, but 75 percent by the millennium.

Yet putting the blame on us is all America Saves Week does. It takes the economic world—our increasing income and wealth inequality, profit seeking by mega corporations that look on consumers as opportunities to extract the maximum in rents—and places the onus on all of us to triumph over it, pennies at a time.

This absurd annual event first began in 2007. At the time, the mortgage crisis was quickly spiraling out of control, but America Saves offered up such “found money” tips like, if you cut out a liter of soda a week, it could save you—get this—$72 annually. At the same time, Kiplinger’s published an article advising people to “dust off their library card and enjoy DVDs and books for free,” while the Associated Presstrotted out a financial adviser from a “wealth management firm” boasting about tossing his loose change in an “old pipe tobacco jar.” Talk about a financial game-changer.

America Saves clearly needs a paradigm shift. So, in the spirit of being helpful, I’ll point out a few facts the organizers behind America Saves should make sure to highlight for the tenth anniversary of the event in 2016. I promise you that action in these areas will save all of us a lot more money than skipping Fifty Shades of Grey at the local multiplex:

• The leading cause of bankruptcy is not lack of impulse control; it’s medical bills and other expenses associated with illness. Management consultant Aon Hewitt reports that out-of-pocket medical expenses for people with employer-provided health insurance surged by more than fifty percent since 2010.

• According to the Obama administration, “backdoor payments and hidden fees” in the retirement savings industry are costing Americans anywhere from $8 to $17 billion annually.

• People in their late twenties and early thirties with student loan debt are less likely to own a home than their unencumbered peers. In fact, even as the United States government has bailed out reckless banks, it’s refused to extend the same helping hand to students who racked up tens of thousands of dollars in debt acquiring useless degrees from for-profit (and now disintegrating) Corinthian Colleges.

• Many workers at places like Walmart, McDonald’s and Starbucks not only don’t know their work schedule more than a few days in advance, they don’t know whether they will work ten or thirty-five hours in any given week. A living and consistent wage will help them a lot more than any bank-sponsored tutorials in budget-planning software.